Surprised By Apple iPad, Forrester To Increase Tablet Forecast

By Eric Savitz

To reflect the strong sales of the Apple(AAPL)iPad, the market research firm Forrester plans to revise upward its old forecast for the tablet computer market.

In a blog post, analyst Sarah Rotman Epps writes that the iPad is “defying common assumptions about consumer technology adoption.”

Epps notes that in her original forecast for the tablet market, published in June, she predicted U.S. consumers would buy 3.5 million tablets in 2010 and 8.4 million in 2011 – and that 59 million Americans would own one by 2015. While Apple said it sold 3.27 million iPads in the June quarter, Epps notes that her forecast includes only the U.S., while Apple is selling the device in multiple markets.

That said, Epps now believes her original forecast was too conservative, and she plans to publish an updated forecast later this year when there is more data available.

“One of the assumptions we made in our initial forecast was that the iPad would behave like other similar consumer devices in its first year of adoption,: she writes. “When it went on sale in April, we assumed that sales would be strong based on pent-up demand for a hyped product; we then assumed that sales would slow in a summer slump, as is common with consumer technology purchases; and that sales would spike again in the holiday season. But the iPad isn’t behaving like other consumer devices: It has a steamroller of momentum behind it that indicates incredibly strong demand for this entirely new form factor.”

Epps says the popularity has been aided by a strong ad campaign, as well as the social influence of iPad buyers – she notes that Forrester data finds that the average iPad buyer is 20% more likely to use Facebook and 40% more likely to use Twitter than the average U.S. online consumer, and has more friends and followers than the average consumer.

A recent Forrester survey found that only 5% of U.S. online consumers say they have never heard of the iPad before the survey; in a comparable May survey, the figure was 17%. By comparison, she notes, three years after the launch of the Amazon Kindle, a quarter of online consumer had never head of the device.

The same survey found that nearly 10 million U.S. consumers own or intend to buy an iPad.

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There are 17 comments

JULY 22, 2010 7:37 P.M.

evanz wrote:

Ms. Epps, just admit you called it wrong. Way wrong. Even in June, you thought the early sales were a fluke. Why should anyone take your "analysis" seriously? I hope people didn't sell AAPL based on your faulty projections.

JULY 22, 2010 8:32 P.M.

Scarlet Pimpernel wrote:

Ms. Epps is entitled to her continuously "changing" opinions.....and that's exactly what they are: Opinions. If anyone, including analysts cannot take into account all the variables neede to prophetically fortella particular product's sales in a future financial quarter or year, than they are not analysts.... They are simply like the rest of us - witnesses to a phenomenl event in consumer purchasing history. Business pundits online, offline, and on TV look like they are in a collective state of denial about Apple's current and future sales revenues, while making themselves look like cavemen: pointing at the fading tail of a long gone shooting star to announce something interesting "could fly by" ! I have never laughed so much during daily buisiness telecasts of CNBC in the months of June and July of 2010. They and everyone else wants Apple to fail and their reaction to Apple revenues was almost assenine. When Google was skyrocketing to new heights there wasn't the same denounciation. Maybe because today's business journalist relies so heavily on Google's search engine technology to look up words like "VOiP", iPhone, Ajax, and "cloud computing" !

JULY 22, 2010 9:40 P.M.

OUCH! wrote:

Did I read terms like assumed and too conservative 7 or 8 times?! ASSUMED?

Analyzing a company, its products, and the markets means there's no conclusive evidence until after the fact and we rely on analysts to connect the dots. IOW the analysts recognize reality regardless of the interstices. Such abilities and efforts require a gift rather than studiousness. Some have it... And we're punished as investors for trusting those who don't.

An analyst should have a logical and creative process. Ultimately. And the picture comes into focus or it doesn't. If it doesn't then using too conservative is quit the understatement. How about : Doesn't get it. Pehaps this analyst might be better analyzing something else. Of course Apple's where it's at, however if from the start there's no knack; that's too revealing. And horribly sad.

The last time I saw Forrester attempt to definitively present something was on the state of mobile's future which as a report came out around the same time Morgan Stanley's Kathryn Huberty came out with hers. HubertY was right on and established herself as maybe not the best at the numbers, however crystal clear on seeing the future. Perhaps Forrester can give some evidence that would assure investors that Epps the analyst can deliver. Is that too much to ask? I might also add that relying on data culled from Twitter and Facebook is revealing in itself. How about dropping the reliance and security of the chair and screen and taking a walk and looking at life in general for which way reality is going. Contexts are required. Otherwise maybe this analyst might be better off analyzing Facebook and Twitter...

JULY 22, 2010 9:45 P.M.

Anonymous wrote:

I know so many people who are talking about getting an iPad. All walks of life and each one's enthusiasm turns the into a sales per on for the device. Smart phones just aren't as relevant anymore. I gave up my iPhone (mainly because of ATT's lousy call service), got a TracFone and an iPad. I loved my iPhone, but just couldn't take the dropped calls anymore.

IPad rocks!

JULY 22, 2010 9:54 P.M.

iPhone 4 ROCKS! wrote:

@Anonymous The importance of combining the iPad and iPhone is the synergy that will reveal itself as time transpires. Will be unmatchable and carrier reliance will diminish as more use wifi and edge. Logical progression unto ecosystem.

JULY 22, 2010 9:58 P.M.

Anonymous wrote:

Consumer Affairs has 22 pages of TRACFONE complaints dude.

JULY 22, 2010 10:12 P.M.

Sales have not begun to taper off yet... wrote:

This thing is still constrained after 3 months. Let's see what happens in 6 months. I believe Apple had to ramp up production very early due to incredible sales. Wallstreet barely noticed.

I think it's succeeding, ironically, for some of the same reasons some pundits objected to it. Namely, that it's 'just an overgrown iPod touch' and it locks you into iTunes, etc... That is, people really like the iPod touch, they UNDERSTAND it, it's great to have it bigger with more capabilities, and iTunes is awesome, well kept, a trusted store with far and away the most software for any mobile devices. Also, despite the CW of the typical tech blogger, it's wide open for development. Apple is essentially only issuing a sort of veto power over full blown apps on it's store, and checking them to be sure they are not filled with spyware, etc... Contrast this to the Windows environment most people are limited to! It's basically free to develop for the app store. With the new version (iOS 4) business can even develop for it and deploy on iPhone and iPad apart from the iTunes store with their own app store like server. Another way to develop for iPad and iPhone is with HTML5, for that you do not have to have an app, it runs from the web. You can do a lot of things with just HTML5, since it's the most highly advanced form and handles video, etc... without plugins.

Furthermore, this is now driving Web development simply because so many content providers (any successful ones) already have the iPad. It's that big of a deal/inexpensive impulse item.

I mean, the 'netbook' offered NOTHING but a lower cost and slightly smaller form factor.

Finally something new.

JULY 22, 2010 10:14 P.M.

JT in NY wrote:

I think the ipad will be far bigger than a lot of people initially thought. I was the first person in my family to buy one, it has exceeded all my expectations and I use it more than my desktop now, it's simply an awesome device. A few weeks ago we had a big family get together at my place. The Ipad was the hit of the day, everybody wanted to use it and marveled at how fast and easy it was to use. Since that day, my family has now purchased 5 of them, not including mine. How many sales will be generated when their friends see and use theirs. Once you spend some time with one, you're hooked.

JULY 22, 2010 10:23 P.M.

Michael wrote:

What a great gig: get paid big money to predict trends, be wrong, change your predictions, still get paid.

JULY 22, 2010 11:05 P.M.

come on wrote:

it's not just her who didn't get it, most analists didn't have a clue. As a matter or fact the only analist I see on tv that understands apple is Jim Cramer.

JULY 23, 2010 12:12 A.M.

Mark wrote:

No Bingo?!

JULY 23, 2010 3:33 A.M.

FOrresterTheLost wrote:

Forrester? The firm that predicted total demise for Apple when iPhone was announced in 2007?

The Forrester that continued to predict collapse after "initial interest" in 2008? The Forrester that was nearly as bad as Toni-the-Warehouse?

The Forrester that is as incompetent and inept as nearly all other analysts when it comes to analyzing Apple's business strategy and product strategy?

The Forrester that continues to charge an arm and a leg for a pile of "toilet" paper report?

THAT Forrester?

JULY 23, 2010 5:18 A.M.

Gus wrote:

Tech analysts are like seasonal weather forecasters. Their own sense of self-conviction is the most remarkable aspect of their predictions. Do we need them? Anyone who actually used an Ipad for 30 minutes would realise how special it is. I am not surprised they are selling as many units as they can make, and will continue to do so. Like the Wii, I realised the device was a game changer. My advice to analysts is stop number-crunching and start using the technology you're talking about.

JULY 23, 2010 5:41 A.M.

Just like a Ringer. wrote:

Market Research Firm. That says it all. Has nothing to do with Investing or Investor's interests..

Therefore who is Forrester representing?
What's the strategy?

Is it : Amazon, Microsoft, Dell, Rim, HP ...
SURE AINT APPLE.

Is the strategy to purposely LOW BALL on behalf of an unknown client's future interests, hence the citation to further report conclusive data after the fact!

Wonderful.
Fa la la. Fa la la. Fa la la.

JULY 23, 2010 6:02 A.M.

Forrester the Professional Fudder. wrote:

SURPRISED. Not.

Said Analyst is responsible for creating and leading Forrestor's Research and Client Strategy for Tablets, eBooks, Netbooks, and PCs...

Re this analyst, all future numbers before the fact must be accompanied by a positive or negative multiple dependent upon inversely reflecting client interests...

Qualifying numbers after the fact is akin to situational ethics or pretending something was lost in the translation. Bogus bogus bogus. Whale hunter at work. Looking for Moby Dick ...

JULY 23, 2010 6:39 A.M.

Henry 3 Dogg wrote:

"... now believes her original forecast was too conservative, and she plans to publish an updated forecast later this year when there is more data available."

Is that a forecast, or historical reporting?

JULY 25, 2010 9:25 P.M.

Jeo wrote:

Forrester says "defying common assumptions about consumer technology adoption". Actually Forrester was just wrong and that's an excuse for their poor analysis.

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